At 34% above weekly average, India moves into surplus rainfall; vegetable prices lead food inflation

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Also Read: India's retail inflation for June surges to 4.81%, economists expect it to rise further Traders and farmers attribute the current price hike of vegetables to a combination of factors. The initial intense heatwave followed by intermittent rainfall and finally the surplus rainfall now has disrupted the vegetable supply chain.

The erratic supply has created shortages in the market, subsequently leading to a sharp surge in prices. Excessive rainfall can lead to flooding, which can wash away soil nutrients and damage crops.

In fact, too much water can cause crops to become waterlogged, leading to root rot and disease. India's consumer price index (CPI) inflation rose for the first time in five months to 4.81 per cent in June - pushed higher than expected due to a less supportive base and the onset of a surge in vegetable prices.

The consumer food price index (CFPI) jumped to 4.49 per cent in June 2023, compared to 2.43 per cent in May month and 7.75 per cent in June of the previous year. The average retail prices for cereals (0.8 per cent), pulses (0.5 per cent) and vegetables (10.4 per cent) were higher on a weekly basis, while oils and fats were marginally lower (-0.4 per cent), according to Arora.

On an annual basis, the average prices for cereals (5.6 per cent), pulses (9.2 per cent) and vegetables (53.5 per cent) were higher, while those for oils and fats (-19 per cent) were lower.  ‘’There has been a sharp increase in tomato prices due to a supply shortfall, caused by a heatwave in February and the delayed monsoon, and this is expected to continue for a month or so until the new kharif crop hits the market around mid-August,'' said Emkay's Arora. Earlier this year, the Reserve Bank of India (RBI) had